By Chris Graebe

Full disclosure at the outset: I’m not a family law practitioner. My practice involves a wide array of business litigation matters, including so-called “business divorce,” but never actual divorce. I will retire happily never having represented a spouse in an equitable distribution matter. However, I have represented business clients who have been joined as parties in equitable distribution actions, and I thought it might be worthwhile to write something about the intersection between the law of equitable distribution and the law that governs the business entities that may be marital property. This post will focus on the law of LLCs, because that is the corporate form most often chosen for closely-held entities. Most, but not all, of the principles discussed here are equally applicable to corporations. Furthermore, this post focuses on the joinder of LLCs in cases involving a non-owner spouse. When a spouse owns an interest in the LLC at issue, the spouse has certain rights under the LLC Act and may have additional rights (or limitations) under the operating agreement. Finally, this post discusses, but does not take a deep dive into, the specific facts of Campbell v. Campbell, 241 N.C. App. 227, 773 S.E.2d 93 (2015) and Geoghagan v. Geoghagan, 254 N.C. App. 247, 803 S.E.2d 172 (2017), the two cases most often cited in connection with the joinder of closely held companies in equitable distribution actions. The reader is encouraged to read those opinions closely if she is not already familiar with them.

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By David C. Herring

Understanding the role of a guardian (or even a durable power-of-attorney) over an incompetent ward is an invaluable tool for our family law clients. One could justify a whole CLE devoted to its usefulness in this context alone. Despite the value of a guardian’s role, the establishment of the guardianship relationship has its limits. This is the holding in a recent and seminal case from the North Carolina Court of Appeals, Dillree v. Dillree, 2022-NCCOA-835.

The Takeaway

A guardian over an incompetent spouse can separate the ward from her spouse if the guardian determines it to be in the ward’s best interest (i.e., her safety is at risk, dementia requires placement in a care facility, and the like). However, a guardian cannot create a legal separation. Namely, a guardian cannot form the determination on the ward’s behalf that such separation from her spouse is done with the intent required to cease the matrimonial cohabitation. Such power would allow the guardian to, in effect, create the necessary intent to begin the one-year separation period for purposes of a divorce and to establish the concomitant rights that come with forming such intent (equitable distribution rights, most specifically). Allowing otherwise, the court holds, is a bridge too far. There are, however, other tools at the guardian’s disposal to help protect assets and matrimonial rights for their principal, specifically, constructive trusts, charging orders, and the like.

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By Chelsea Gajewski

The John B. McMillan Distinguished Service Award honors current and retired members of the North Carolina State Bar throughout the state who have demonstrated exemplary service to the legal profession. Members of the Bar nominate colleagues who they feel have demonstrated service to the profession. The criteria to be selected for this award includes, but is not limited to, furthering the public’s understanding of and confidence in the law and justice system; devoting time to leadership to ensure equal access to our justice system; pro bono work to those who have limited meals; and treating opposing counsel with courtesy and respect. You can learn more about this award on the North Carolina State Bar’s website.

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By Ketan Soni

A. We had a Council meeting on January 12, 2023. The next meeting is on March 23, 2023, in Cary, NC.

You might ask: “Why wasn’t I invited?”

The answer is: “You’re not signed up to volunteer as a committee chair or a council member.”

Then, you might say: “Well, how can I get more involved?”

My response would be: “Have you not read any of the previous blog posts where I tell you exactly how to do this? Are you so stinking busy that you can’t take the 15 seconds to email me or Cheyenne Merrigan to get signed up?”

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